North Carolina Homeowners Association Board of Directors
North Carolina law affords substantial deference to an association’s governing documents, including the declaration and bylaws. Unless in conflict with the NCPCA, these documents are presumed to be enforceable under their terms.
Board members are answerable to homeowners through removal proceedings and elections at member meetings, following the procedures outlined in the declaration or bylaws. Amendment of the declaration, termination of the community, and decisions relating to board members’ qualifications, powers, or terms may only be made upon member approval.
In 1999, the North Carolina General Assembly enacted the Planned Community Act (PCA) which provides a number of legal protections for owners in North Carolina planned communities. Prior to the PCA, these communities were governed solely by the Developer’s Declaration of Restrictive Covenants and Association Bylaws which often failed to address key issues governing community governance.
In addition, provisions were frequently slanted in favor of the Developer. For example, the Sugar Hill HOA’s 1997 and 2012 Declarations allowed the Association to charge lots owned by individuals who purchased contiguous lots from Mountain Creek Land Company on a per-lot basis without having to get prior owner approval.
In addition, the PCA allows a community declaration to be amended by an affirmative vote of at least 67% of owners in the association or any smaller majority if the declaration specifies. This mechanism gives owners a degree of control over the budget that many pre-1999 communities lack.
A homeowners association is governed by a series of governing documents. These documents outline the responsibilities of the HOA, and they are designed to circumscribe how much power the it can have.
The first document is the Articles of Incorporation, which are needed to create the community. This document has little impact on the everyday operation of the HOA, and it is not something that most Board members will want to review regularly.
The second governing document is the bylaws of the association, which are usually adopted shortly after the Articles of Incorporation are approved. This document sets out the responsibilities of the Board and members, and it also gives them the power to establish rules and regulations for the community.
All property owner associations in North Carolina must have regular Board meetings and at least one annual membership meeting to transact association business. These meetings are governed by applicable law and the governing documents of the association.
The Board may also call special meetings of the entire membership when an issue arises that is not addressed by the Board or the annual meeting. For example, a board may need to remove a board member, deal with a special assessment, or address an emergency situation.
AMSHOA members must receive notice of such meetings and vote on issues proposed by the board. The notice must describe the date, time, and place of the meeting, along with the items on the agenda. These include the general nature of any proposed amendment to the association’s Declaration or Bylaws, any budget changes, or any proposal to remove a director or officer.
The executive board is an important committee for an association, and it’s usually responsible for the association’s budget. It is also responsible for determining and enforcing any community rules or policies that affect homeowners’ lives.
The board must be able to conduct its business without relying on members for input. It is also responsible for creating and updating governing documents.
The board often goes into closed session for a variety of reasons. Sometimes it’s to discuss controversial topics, such as a proposed rule change. Other times, it may be to conduct business by telephone or e-mail. It’s important for the board to consider whether it’s appropriate and what governing documents and state statutes say about it before going into a closed session. This will prevent costly litigation in the future.
Removing a board member from your association’s executive board can be a useful and effective tool for managing an issue or concern that might otherwise prove impossible to resolve. However, the process varies depending on the applicable state law and your development’s governing documents.
In general, removing a member is an option only when you have a good reason for doing so. This is typically when a board member’s actions are jeopardizing the operation of your HOA or community, or are acting in a way that violates any one or more of its governing documents.
The removal process typically requires the approval of a majority of the homeowners in your development. This must be accomplished in accordance with the required procedures under your state’s laws and your development’s governing documents, including prior notice, special meetings, quorum, and proxy voting requirements.